Question 1
Related to the
Economics in Practice on page 316: Producers of Honest Tea stop adding sugar to their tea when the marginal utility to consumers of doing so is
◦ positive.
◦ negative.
◦ zero.
◦ Indeterminate from the given information.
Question 2
Related to the
Economics in Practice on page 316: A company selling iced tea discovers that as sugar is added to tea, customers' opinions of the taste of the tea rises for the first few grams of sugar and then drops. Even so, the company chooses not to add the amount sugar that would result in the best-tasting tea. Which of the following would explain why adding less sugar could be a wise decision?
◦ The price of sugar added to tea is much less significant than the price of other ingredients, such as tea leaves.
◦ Manufacturers of tea are required to clearly indicate the amount of sugar in their products.
◦ Teas with less sugar are more likely to appeal to health-conscious consumers.
◦ Many products in the cold drink market are sold with substitutes for sugar, such as high fructose corn syrup.
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